KiwiSaver Contributions Decline as Cost of Living Crisis Strikes

The number of New Zealanders contributing to their KiwiSaver accounts has dropped for the first time, reflecting the significant impact of the ongoing cost of living crisis. According to the Financial Markets Authority’s (FMA) annual KiwiSaver report, the decline occurred in the year ending March 2025. This troubling trend highlights the financial strain many households are experiencing as they prioritize immediate needs over long-term savings.

Samantha Barrass, the chief executive of the FMA, addressed the challenges facing New Zealanders in a recent statement. She noted that many families are now forced to make “difficult choices” regarding their finances. With rising costs for essentials such as food and housing, contributing to retirement savings has become a lower priority for some.

The FMA’s report indicates a shift in focus for many households, as decisions about basic necessities take precedence over future savings. Barrass emphasized the importance of financial providers reaching out to individuals who have paused their KiwiSaver contributions. She believes that communication can help remind them of the long-term benefits of saving for retirement, even in tough economic times.

As the cost of living continues to escalate, the implications for retirement planning are becoming increasingly concerning. The FMA report underscores the need for greater awareness about the importance of maintaining contributions to retirement funds. Barrass highlighted how essential it is for individuals to balance their current financial obligations with their future security.

In light of these developments, financial experts are urging New Zealanders to reassess their budgets and explore ways to continue contributing to their KiwiSaver accounts, even if in smaller amounts. The long-term benefits of consistent contributions can significantly impact their financial well-being in retirement.

The decline in KiwiSaver contributions serves as a reminder of the broader economic challenges faced by many in New Zealand. As the cost of living crisis persists, individuals and families will need to navigate these difficulties while keeping their future goals in mind.